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The principal amount of a bond that is repaid at the end of the term. (Also called par value.)
The written agreement between the corporation and the lender detailing the terms of the debt issue.
The form of bond issue in which the registrar of the company records ownership of each bond; payment is made directly to the owner of record.
The form of bond issue in which the bond is issued without record of the owner's name; payment is made to whomever holds the bond.
An agreement giving the corporation the option to repurchase a bond at a specified price prior to maturity.
Deferred Call Provision
A call provision prohibiting the company from redeeming a bond prior to a certain date.
A part of the indenture limiting certain actions that might be taken during the term of the loan, usually to protect the lender's interest.
Zero Coupon Bond
A bond that makes no coupon payments and is thus initially priced at a deep discount.
The price of a bond net of accrued interest; this is the price that is typically quoted.
The price of a bond including accrued interest, also known as the full or invoice price. This is the price the buyer actually pays.
Term Structure of Interest Rates
The relationship between nominal interest rates on default-free, pure discount securities and time to maturity; that is, the pure time value of money.
The portion of a nominal interest rate that represents compensation for expected future inflation.
Default Risk Premium
The portion of a nominal interest rate or bond yield that represents compensation for the possibility of default.
The portion of a nominal interest rate or bond yield that represents compensation for unfavorable tax status.
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